Restructuring CPC: Trade union submits proposals

While the government is considering the restructuring of the Ceylon Petroleum Corporation (CPC) to make the entity a profitable venture, CPC trade unions have submitted proposals for the new Budget to take the State entity out of its financial mess.

The CPC is running at a huge financial loss and up to May this year, has posted a loss of over Rs. 6.9 billion with around Rs. 240 billion in accumulated losses.

The media secretary of the Ceylon Petroleum Common Workers Union (CPCWU), D.J. Rajakaruna said that they have proposed several practical solutions that would definitely increase revenue and profit at the CPC.

Constructing a new oil refinery or modernizing the Sapugaskanda oil refinery should be the first priority. The Sapugaskanda refinery built in 1969 is technologically outdated today and experiencing frequent shutdowns due to technical issues.

Today, 40% of its output is furnace oil, whereas in modern refineries furnace oil production is as low as 5-10 percent. Oil refining is a highly profitable business and in addition to main fuel oil all other byproducts such as furnace oil, lubricant, tar and LP gas are revenue sources.

Relaunching the bunkering business is another proposal presented by the CPCWU. Until 2002, bunkering had been a CPC monopoly and in 2002, the government privatized this business.

Today, several private players including the Lanka Indian Oil Company (LIOC) are engaged in this lucrative business.